The Secret Room — Uri Shulevitz

While traveling in the countryside, a king asks a gray-haired man why his beard is black. "Because my head is older than my beard," he replies. The king is so impressed with the man's clever answer that he soon names him treasurer of the kingdom. But the chief minister is jealous of the influence this outsider has over the king and accuses him of stealing. In order to prove his innocence, the new treasurer must be wise as well as clever.
With jewel-tone watercolors, this simple but rich story by the Caldecott Medalist is sure to become a folktale favorite.